In his State of the Union address on February 12, 2013, President Obama announced that the Administration plans to notify Congress of its intent to launch negotiations on a Transatlantic Trade and Investment Partnership with the European Union (EU). The President’s decision recognizes that the U.S.-EU economic relationship is already the world’s largest, accounting for one third of total goods and services trade and nearly half of global economic output. The Transatlantic Trade and Investment Partnership is envisioned as an ambitious, high-standard trade and investment agreement that would provide significant benefit in terms of promoting U.S. international competitiveness, jobs, and growth.
The U.S. economic relationship with the EU is the largest and most complex in the world, generating goods and services trade flows of about $2.7 billion a day [2012 estimate] and transatlantic investment is directly responsible for roughly 6.8 million jobs [2010 estimate]. This enormous volume of transatlantic trade and investment promotes economic prosperity on both sides of the Atlantic and in the dozens of other countries that trade with the transatlantic partners. The United States and the EU continue to pursue initiatives to create new opportunities for transatlantic commerce.
Key Trade and Investment Data and Trends
U.S. exports to the EU accounted for 21 percent of overall U.S. goods and services exports. U.S. imports from the EU accounted for 19 percent of overall U.S. goods and services imports. The U.S. purchased 17 percent of all EU goods exports and 25% of all EU services exports, and supplied 11 percent of all EU goods imports, and 31% of all EU private services imports.
Trade in goods. The U.S. goods trade deficit with the EU was $115.7 billion in 2012, a 15.9% increase over 2011. U.S. goods exports in 2012 were $265.1 billion, down 1.2% from 2011, but up 57% from 2000. Corresponding U.S. imports from the EU were $380.8 billion, up 3.4 percent from 2011, and up 67% from 2000.
Trade in services. The United States had a private services trade surplus of an estimated $55.4 billion with the EU in 2012, up 6.5% from 2011.
U.S. exports of private commercial services (i.e., excluding military and government) to the EU were an estimated $194 billion in 2012, up 2.8 percent from 2011, and up 108 percent since 2000. Other private services (business, professional, technical, and financial), royalties and license fees, and travel categories accounted for most U.S. services exports to the EU.
Sales of services in the EU by majority U.S-owned affiliates were $499 billion in 2010 (latest data available), while sales of services in the United States by majority EU-owned firms were $382 billion. Intrafirm trading - trade that takes place within the same company - accounts for more than half of total U.S. trade with the EU.
Agricultural trade. U.S. exports of agricultural products to EU countries totaled $9.9 billion in 2012. The EU countries together rank 5th as an agricultural export market for the United States. Leading categories include: tree nuts ($1.7 billion), soybeans ($1.5 billion), processed fruit and vegetables ($514.9 million), wine and beer ($492.4 million), and feeds and fodders ($405.5 million).
U.S. imports of agricultural products from EU countries totaled $16.6 billion in 2012. The EU countries together rank 2nd (after Canada) as a supplier of agricultural imports to the United States. Leading categories include: wine and beer ($5.0 billion), essential oils ($1.9 billion), snack foods ($1.1 billion), processed fruit and vegetables ($934 million), and feeds and fodders ($832 million).
Investment. U.S. and EU investors together owned roughly $3.7 trillion in direct investment in each other's economy in 2011. The stock of U.S. foreign direct investment (FDI) in the EU totaled $2.1 trillion in 2011 (latest data available), and the stock of EU FDI in the United States was worth $1.6 trillion that year. U.S. FDI in EU countries is primarily concentrated in nonbank holding companies, finance/insurance, and manufacturing sectors. EU countries' FDI in the United States is mostly in the manufacturing, finance/insurance, wholesale trade, and information sectors.
The EU countries with the largest FDI in the United States are the United Kingdom, the Netherlands, Germany, and France.